Hey bud, welcome to the forum...
I do not have a 98, but it should not be much different either way.
The holes are probably either nutserts or some kind of "slip over" mount for the screw/bolt to go through when the flares are mounted to the vic.
You shouldnt* have an issue with them being open, but without seeing it, it willb e hard to answer. Can you snap and post a pic?
Rust shouldnt* increase. Again, we need to see it.
Silicone would work, or some weld/body filler/paint to match if it was going to permanent.
On the WD21, the front valance or "flare" is bolted to the bumper, radiator support and to the fenders. Its a PITA to get off, (well it was on mine.) but reveals a bunch of ugly if taken off.
Good luck bro.